CalPERS investment returns fall below 1 percent

July 25, 2016

CalPERSCalPERS earned a return on its investments of just .6 percent in the last fiscal year, marking the state retirement fund’s worst performance since 2009. The pension system must average a yearly return of at least 7.5 percent to meet its actuarial assumptions. [Bloomberg]

Lowering the return expectation forces government agencies to pay more into the system. Local governments have been attempting to stall further decreases.

In fiscal year 2016, CalPERS’ stock portfolio declined in value by 3.4 percent. Stocks comprise about 52 percent of the pension system’s assets, which totalled $295 billion as of June 30.

The retirement fund’s forestland assets declined 9.6 percent over the last fiscal year. CalPERS’ fixed income holdings, which include bonds, gained 9.3 percent, and infrastructure investments rose by 9 percent.

Total CalPERS returns have averaged 6.9 percent over the last three years, 5.1 percent over the last 10 years and 7 percent over the last 20 years. The pension system lowered its return expectation from 7.75 percent to 7.5 percent in 2012 and is now considering lowering it to 7.25 percent.

In 2009, CalPERS lost a quarter of its value. The retirement fund has since been plagued by market volatility.

CalPERS received a record return of 20.7 percent in fiscal year 2011 and then fell to 1 percent the following year. In 2015, CalPERS earned a return of 2.4 percent.


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Black_Copter_Pilot

Amazing, they use a 7.5% return assumption that they fail to get. You would think they would change to a lower assumption to they can meet their obligation by collection more contribution.


shelworth

But I’m sure the people who do the investing get their pay and commissions. The 10 year treasury note is paying 1.58% almost 3 times what CalPERS got.


curiouser and curiouser

I can see it now…the Board of Supervisors majority will propose a Self-Help County Sales Tax for the Public Employees Retirement Fund! God help us!


Kaiser Bill

SLO County Employees have their own pension fund that is separate from CALPERS.


Facts don’t care about your feelings.


Jorge Estrada

I can’t wait until Trump is elected President because he will be the first to tell Gov that T.S. does not mean Tax Secured. I would invest in a Piggy Bank manufacture and work at your labor of love because retirement is going to be a problem with a 23 Trillion Dollar debt.


isoslo

I can hear the politicians, “we had no choice, we had to increase the tax rates due the crisis”.

When my retirement plan went down the politicians bailed out the financial institutions who stole my money, but now that it is their money…


joseywales

this has been coming for a while now…..can you imagine the revolution that will occur when all these parasites stop getting their monthly welfare checks?


Kaiser Bill

Yes, a secretary who worked 40 years for the government getting a $50K/ years pension is a “parasite.”


Thankfully, this stupid Conservative line of thought has been killed by Donald Trump forever and replaced by American Nationalism.


BeenThereDoneThat

Yea if 40 years but a lot work 20-25 years, retire at 50 with a 75-80 percent of pay compensation for the next 30-40 years. If I have to explain how that is a recipe for disaster, then you must be a little thick between the ears,.


Kaiser Bill

Most of the occupations that retire at 50 are public safety: law enforcement and firefighters.


We obviously do not want old geezers in public safety jobs, but there should be some alternative such as putting older public safety employees into office and administrative work rather than allowing them to retire.


The only people thick between the ears are Conservatives who never understood that it is political suicide to attack middle class people who worked hard to earn a modest retirement pension. Thankfully, Conservatism is dead.


hijinks

“The retirement fund has since been plagued by market volatility.” Everybody’s investments have been plagued by market volatility. That’s just the way the market is. Note, one year they earn 20%, the next nothing. It averages out over time.


panflash

“In fiscal year 2016, CalPERS’ stock portfolio declined in value by 3.4 percent.”


Wow- now that’s quite an achievement, seeing as how the S&P 500, DJIA and NASDAQ are all at record all-time highs.


Makes ‘ya kinda wonder just what the Hell kinda stocks CalPERS has “invested” in. In fact, it makes ‘ya kinda wonder a lot of things about CalPERS, doesn’t it?


Watch out, folks- this CalPERS House of Cards might finally be nearing collapse. Any guesses as to who they will pass the bill along to?


kayaknut

One word, taxpayers


Mr. Holly

Nothing to fear. The government will just get into our pockets again to fund their inflated retirements. They will not absorb their losses but will instill additional losses to the taxpayers to fund themselves.


Rich in MB

And now friends we find out what is REALLY behind the SLO County 1/2 cent sales tax increase! They need to use more general fund money to pay into the Pension Program so they need to find some other money.


Do you have a big fat pension?

Do you have Cola pay increases on your job?

Do you have it as good as the Government workers?


No

No and

No.


So the question is now, what are we (the ones paying for this largess) going to do about it?

Are we going to give the SLO County Government their 1/2 cent tax increase on the backs of the working class for them to feather their beds or are we the people finally going to stand up and say…BASTA….ENOUGH.


r0y

You forgot one:

Are you LIABLE (legally and/or financially) and held to account for poor job performance?